Tuesday December 21, 2004 - 18:58:43 GMT
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Dollar Trades Higher
The dollar traded higher against the British pound and Japanese yen in a whippy trading session. GBP/USD fell from 1.9450 to 1.9250 after the UK RICS checked in at a much worse than expected level while USD/JPY rose from 103.71 to 104.69. In addition, EUR/GBP ripped through key .6900 resistance en route to a .6946 high and EUR/USD bounced around between 1.3350 and 1.3410. Year end liquidity issues probably had something to do with GBP/USD’s tumble but keep in mind the EUR/GBP cross was sold heavily by technical accounts on last week’s .6870 break. So as those positions were squared up along with GBP/CHF and GBP/JPY longs, the dollar benefited on a large scale. However, the failure for EUR/USD to play “catch up” or even threaten the key 1.3320 level leads us to believe dollar sellers still lurk as we head into the last week of trading.
TECHNICALLY SPEAKING We still see supports at 1.3320 and 1.3275 in EUR/USD. Congestion remains at 1.3400-10 and 1.3440,13475 are key medium term tops. The Slow Stochastic on the 60 minute chart is neutral.
GAIN AN EDGE We will try to buy EUR/USD at 1.3325 with a 1.3270 stop and a 1.3490 limit.
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